Meet the Edmontonian most likely to succeed Warren Buffet
Greg Abel one of two new vice-chairs
CALGARY — The person most likely to succeed the world’s most successful investor, Warren Buffett, is an Edmontonian with a University of Alberta business degree.
Buffett’s Omaha-based Berkshire Hathaway Inc. announced Wednesday the appointment of two new vice-chairmen, elevating Ajit Jain, 66, and Canadian-born Greg Abel, 55, to the company’s board of directors and signalling a succession plan that had long been expected but not announced.
Many analysts believe the younger Abel has the edge over Jain to succeed Buffett as chief executive.
Jain and Abel had previously been rumoured as successors to Buffett, but the legendary investor finally made their positions clearer in a television interview Wednesday with CNBC when he said, “It’s part of a movement toward succession over time and they are the two key figures.”
Buffett denied that the dual appointments set up a competition for the top job and said, “There’s no horse race at all. They know each other well. They like each other well.”
The 87-year-old Buffett, who runs the business with 94-year-old vice-chairman Charlie Munger, is among the richest people in the world, and has amassed a sprawling US$500 billion business empire that includes Dairy Queen, Geico Insurance Company and Duracell, and stakes in Apple Inc., Mastercard Inc., Tim Hortons parent Restaurant Brands International Inc. and Delta Air Lines Inc.
Berkshire Hathaway’s A shares on the New York Stock Exchange rose 1 per cent to US$307,600.
While Buffett stopped short of singling out either Jain or Abel, the promotions seem to indicate a preference for Abel, St. Louisbased Edward Jones analyst James Shanahan said.
Shanahan said Wednesday’s announcement is a bigger promotion for Abel than it is for Jain, who will continue to oversee Berkshire’s insurance business.
Abel had previously been head of Berkshire Hathaway Energy but will now be responsible for all of the company’s business operations outside of its insurance division, which Jain oversees.
Abel, who joined the company in 1992, built the company’s energy division into a powerhouse that includes significant coal, renewables and electric transmission businesses through a series of mergers that honed his skills as a dealmaker, which would come in handy as Berkshire Hathaway reportedly has a US$100 billion cash hoard that can be deployed for acquisitions.
He will now oversee operations such as Berkshire’s wholly-owned BNSF Railway, which is a significant promotion. Shanahan said it also seems to rule out another potential Buffett successor, BNSF president and CEO Matthew Rose, and further elevates Abel.
“He will now be responsible for all these other operations, including the railroad, the financial products, retailing, manufacturing businesses that they own — it’s a far larger, more diverse and significant group of companies than insurance at this point,” Shanahan said, adding that Abel also has the advantage of being younger than Jain and has developed more of a profile with analysts, investors and the press.
Berkshire Hathaway did not respond to a request for comment.
The appointment was also cheered at the University of Alberta, where business professors have closely followed Abel’s career during his rise through Berkshire.
“I’m tickled, as I always am, when one of our alumni is successful in their career,” UofA School of Business dean Joseph Doucet said, adding that Abel had “very generously given of his time” to his alma mater by giving speeches to students and other alumni at the university.
Not everybody is convinced Abel will be the eventual successor.
In recent years, responsibility for some of Berkshire’s insurance businesses, like General Reinsurance Corp., have been consolidated under Jain.
Vancouver-based Odlum Brown analyst Benjamin Sinclair thinks it’s a bit premature to speculate on who, between Abel and Jain, is the frontrunner for Buffett’s job once the 87-year-old billionaire departs the company.
“Ajit Jain has been singled out for praise in the annual letters” more often in recent years, Sinclair said, which itself could be a signal that Buffett is leaning toward Jain rather than Abel.